Hippo Valley Estates Limited recorded a 21% decline in sugar production in the first quarter ended June 30, 2026, after heavy rains disrupted harvesting and delayed the start of the crushing season.
The company said cane deliveries from both its own plantations and private farmers fell by 25% compared with the same period last year, as wet conditions made fields difficult to access.
“Cane deliveries from own plantations and private farmers, both declining by 25%, primarily due to disruptions caused by rains at the start of the crushing season,” the company said in its trading update.
The decline in cane supply, combined with periods of plant downtime and reduced throughput, resulted in sugar production falling by 21%.
Despite the weaker start to the season, management remains confident that production will recover, supported by its cane supply system and improved factory reliability.
“Despite the slow start, management remains confident that cane deliveries will recover without further disruptions,” Hippo Valley said.
Revenue, however, remained stable at US$51.8 million, broadly unchanged from the prior year. The company said a more favourable product mix helped offset the impact of lower sales volumes.
The domestic market remained the main source of revenue, accounting for 93% of total sales volumes, with local sales volumes increasing by 8% year-on-year.
The company attributed the growth to commercial initiatives, customer engagement programmes and trade promotions, with its Huletts SunSweet brand continuing to gain ground.
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“The local market continues to generate superior margins relative to export markets,” the company said.
Export sales were weaker than expected due to trade restrictions affecting volumes previously destined for Kenya and a slower-than-planned start to export shipments.
Hippo Valley said it would continue prioritising the domestic market as global sugar prices weaken amid expectations of a supply surplus.
The company is also facing rising production costs, particularly for fuel and fertiliser, driven by global supply disruptions and geopolitical tensions.
“Management remains committed to protecting profitability through a comprehensive cost management programme focused on mitigating input cost increases while maintaining operational efficiency and product quality,” it said.
The sugar producer is also preparing for possible El Niño-related weather conditions in the 2026/27 rainfall season. However, water storage levels are currently between 95% and 100%, providing sufficient irrigation water for at least two seasons.
“Water storage levels currently range between 95% and 100%, providing sufficient irrigation water for at least two seasons,” Hippo Valley said.
The company said it would continue monitoring weather conditions, global sugar prices and input costs while implementing cost-control measures under Project Zambuko.
Hippo Valley also reported no fatalities, lost-time injuries or major environmental incidents during the quarter.
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